Alan Greenspan is disappointed in Dodd-Frank

I am devastated. Writing in the Financial Times today, Alan Greenspan, argues that the Dodd-Frank Wall Street Reform and Consumer Protection Act will have–indeed is already having–unintended consequences. He cites five specific cases. 1) Making credit ratings agencies legally liable for their opinions about risk made them unwilling to give Ford Motor Credit a rating … Read moreAlan Greenspan is disappointed in Dodd-Frank

On low probability-high cost events

Earthquakes, tsunamis, and nuclear accidents are low probability-high cost events. So are financial crises. There is nothing we can do to prevent earthquakes and tsunamis.  Sure, with improving technology, we are sometimes able to get a bit of advance warning.  And we can design structures that are more resistant to natural disasters.  For the most … Read moreOn low probability-high cost events

Playing Chicken in the City (Chicken à la King?)

It looks the banking news from Britain will continue to be interesting for a while. The Treasury and Bank of England Governor Mervyn King are lining up in support of the as-yet unreleased report of the UK Independent Commission on banking  headed by Sir John  Vickers.  The commission is expected to recommend that UK financial … Read morePlaying Chicken in the City (Chicken à la King?)

Forum shopping

The Financial Times reports that Oswald Grübel, chief of the Swiss bank UBS, “…has attacked the UK government for its public neglect of the City of London, warning that tougher regulations will see Britain and the rest of Europe cede investment banking business to Asia and the US.” Yes, by all means, let’s not overdo … Read moreForum shopping